POTUTO (DO NOT DELETE) 6/12/2014 11:54 AM JOSEPHINE (JO) R. POTUTO, WILLIAM H. LYONS†, AND KEVIN N. RASK‡ What’s in a Name? The Collegiate Mark, the Collegiate Model, and the Treatment of Student-Athletes Introduction ...................................................................................... 881 I. Amateurism ........................................................................... 887 A. Amateurism Redux ......................................................... 887 B. Amateurism on Campus and the NCAA ........................ 889 II. Athletic Spending and Student-Athlete Benefits ................... 894 A. The Campus ................................................................... 895 B. The Big Money and Where It Goes ............................... 899 C. The NCAA and Student-Athletes ................................... 903 Josephine (Jo) R. Potuto is the Richard H. Larson Professor of Constitutional Law at the University of Nebraska College of Law. She is the university’s faculty athletics representative (FAR), a required campus position at all NCAA member institutions. Potuto served nine years as a member of the Committee on Infractions (two years as chair); more than four years on the Division I Management Council, including service on both its Legislative Review and Administrative Review Subcommittees; and also served as a member of the NCAA Special Review Committee that evaluated and made operational a special consultant’s report on enforcement and infractions. † William H. Lyons is the Richard H. Larson Professor of Tax Law at the University of Nebraska College of Law. Lyons served as Professor-in-Residence to the Chief Counsel of the Internal Revenue Service, is the Managing Editor of The Tax Lawyer (published by the Tax Section of the American Bar Association), a former Committee Chair in the Tax Section, and a Fellow (and former Regent) of the American College of Tax Counsel. Both Lyons and Professor Potuto much appreciate the support of the University of Nebraska College of Law through its McCollum Summer Research Fund. ‡ Kevin Rask is a College Research Professor in the Department of Economics and Business at Colorado College. Rask holds an MA and PhD in Economics from Duke University. He teaches courses in the economics of higher education and econometrics. His current research is focused on student choice, university spending, and the labor market outcomes associated with a college degree. Rask has also served as a consultant to over twenty colleges, universities, and law schools on issues relating to admissions, financial aid, and athletic aid. [879] POTUTO (DO NOT DELETE) 6/12/2014 11:54 AM 880 OREGON LAW REVIEW [Vol. 92, 879 III. NCAA Amateurism Bylaws .................................................. 904 A. Student-Athletes ............................................................. 904 B. NCAA, Conferences, and Universities .......................... 905 IV. Keller/O’Bannon Litigation ................................................... 908 A. Legal Claims, in General and in Brief ............................ 909 B. EA Sports Videogames .................................................. 911 C. Broadcast Rights ............................................................ 912 1. Financial Consequences ........................................... 915 2. More than Financial—the Collegiate Mark and the Slippery Slope .................................................... 916 V. Valuing an FBS Football Student-Athlete and a Division I Men’s Basketball Student-Athlete ......................................... 918 A. Preliminary Comments ................................................... 918 1. Athletic Department Revenue Accounting ............... 920 a. Revenues ............................................................ 920 b. Matching Expenses ............................................ 921 2. Marginal Revenue Product ....................................... 922 3. Value ........................................................................ 922 B. The Literature on the Value of a Division I Student- Athlete ............................................................................ 923 C. Analysis of Econometric Model ..................................... 926 1. Data and Methodology ............................................. 926 2. Descriptive Information ........................................... 928 3. Specification Issues and Models .............................. 930 4. Results ...................................................................... 933 VI. Accommodating Student-Athlete Name and Likeness Compensation Within the Collegiate Model ......................... 937 A. Title IX ........................................................................... 938 B. Dissension ...................................................................... 939 VII. Federal and State Income Tax Consequences of Making Name and Likeness Payments to Student-Athletes ............... 942 A. University-Established Holding Accounts ..................... 943 1. The Constructive Receipt Doctrine .......................... 944 2. The Economic Benefit Doctrine ............................... 945 B. Private Express Trust ..................................................... 949 1. Trust Law Issues ....................................................... 949 2. Income Tax Issues Associated with Using a Trust ... 950 3. Resolving the Quandary ........................................... 952 VIII. The Drift in the Collegiate Model ......................................... 954 A. How Revenue Is Generated ............................................ 954 1. Merchandise, O.K. ................................................... 955 POTUTO (DO NOT DELETE) 6/12/2014 11:54 AM 2014] What’s in a Name? The Collegiate Mark, the Collegiate Model, and 881 the Treatment of Student-Athletes 2. Merchandise, Not O.K. ............................................ 956 3. Advertisements, O.K. .............................................. 957 4. Advertisements, Not O.K. ....................................... 957 5. Media Contracts, O.K. ............................................. 957 B. Wink, Wink .................................................................... 958 1. Outsourcing .............................................................. 960 2. Policing ..................................................................... 960 C. How Money Is Spent and Exempt Status for Federal Income Tax Purposes ..................................................... 961 IX. A New Paradigm ................................................................... 962 A. Doing More for Student-Athletes ................................... 962 1. Educational Aid ........................................................ 962 2. Fair and Equitable Treatment ................................... 963 a. Transfers ............................................................ 963 b. Oversigning ........................................................ 964 c. Play/Practice Limits ........................................... 964 d. Assistance in Evaluating Professional Potential ............................................................. 965 e. Independent Voice in Student-Athlete Reinstatement Processes .................................... 966 f. Health and Well-Being ...................................... 966 B. Aligning with the Collegiate Model ............................... 967 C. The Flip Side of Name and Likeness: Student- Athletes Marketing Themselves ..................................... 967 1. Emma Watson vs. Sam Keller .................................. 968 2. What’s Good for the Goose ...................................... 971 X. All Things Considered ........................................................... 972 A. Negative Consequences.................................................. 972 B. What Might Be Done ..................................................... 974 C. Final Thoughts ............................................................... 975 Appendix Table 1: Econometric Estimates from the College Football Models ..................................................................... 977 Appendix Table 2: Econometric Estimates from the Men’s College Basketball Models .................................................... 978 INTRODUCTION he amateurism principle has been a mainstay of college athletics, Tat least since the inception of the National Collegiate Athletic POTUTO (DO NOT DELETE) 6/12/2014 11:54 AM 882 OREGON LAW REVIEW [Vol. 92, 879 Association (NCAA)1 in 1906.2 In its narrowest sense, it means that athletes who are, or have been, paid to play are thereby ineligible to compete in varsity athletic competition.3 More broadly, it means that student-athletes professionalize themselves if they capitalize financially on their athletic skill or reputation.4 The amateurism principle forms part of the “collegiate model” of intercollegiate athletics whereby university athletic programs are to be “a vital part of the educational system,”5 student-athletes are to be “an integral part of the student body,”6 and there is to be “a clear line of demarcation between intercollegiate athletics and professional sports.”7 In turn, the collegiate model advances the “collegiate mark”—a market product for collegiate athletics that is separate from the market for professional sports. Certainly, there is something essentially right in requiring that those who compete on a university athletic team must be students at that university in more than